Hello friends,

Individual return, HI resident.  Taxpayer completed a 1031 - exchanged a real property in California for a real property in HI.  There was a realized gain of $1.3mm and a recognized gain of $220k.  The deferred gain is showing in the the CA Amounts (Part II, Column E, Line 7) of the Schedule CA-NR.  The result of this is that the taxpayer's California tax is greatly overstated.  He should be taxed on the $220k recognized gain but he's paying on the realized gain.  

The CA-NR instructions say, "Complete Schedule D (540NR) Worksheet for Nonresidents and Part-Year Residents, to compute this amount." but Lacerte is not generating the worksheet.

Can someone tell me what I'm missing here?  Any input is greatly appreciated.